Here's what it would take for Trump to back off on China trade: Advisor Hassett

  • The U.S. would consider backing off on trade once China begins acting like a developed nation, Kevin Hassett says.
  • China hasn't been adhering to developed country rules under the WTO with respect to trade, he argues.
  • Hassett says he expects better deals with China soon as a result of Trump's tactics. "You're going to like the deals when you see them."
U.S. President Donald Trump, left, and Xi Jinping, China's president, shake hands during a news conference at the Great Hall of the People in Beijing, China, on Thursday, Nov. 9, 2017.
Qilai Shen | Bloomberg | Getty Images
U.S. President Donald Trump, left, and Xi Jinping, China's president, shake hands during a news conference at the Great Hall of the People in Beijing, China, on Thursday, Nov. 9, 2017.

The U.S. would consider backing off on the China trade war once the world's second-largest economy "begins acting like a developed nation," a top economic advisor to President Donald Trump told CNBC on Monday.

Kevin Hassett, chairman of the Council of Economic Advisers, argued that China has "not really been adhering to the developed country rules" under the World Trade Organization "with respect to trade."

"The end game is that China begins acting like a developed nation." Hassett said in a "Squawk Box" interview. "[If] they lower their tariff barriers on us, they open up their markets to us; and if they do that, then I think there's a positive outcome that we can see down the road."

Trump's tariffs on $34 billion worth of Chinese goods kicked in Friday. Shortly thereafter, China imposed reciprocal measures.

Trump has claimed China, considered a developing nation by the WTO, receives "tremendous perks and advantages, especially over the U.S."

Hassett, a former economist at the American Enterprise Institute and ex-senior economist at the Federal Reserve, reiterated that argument Monday. He said China has been "misbehaving" and the WTO has done nothing about it.

The administration's moves have frustrated some lawmakers, especially in states heavily depended on international trade. China said that the United States is attacking the world with its tariffs.

According to the WTO, members announce for themselves whether they are “developed” or “developing” countries and the status can bring certain rights such as technical assistance.

Hassett said he expects better deals with China soon as a result of Trump's tactics. "We're going to get deals and you're going to like the deals when you see them."

Before his appointment, Hassett had also been a consultant to the Treasury Department and an advisor on presidential campaigns, including Republican Mitt Romney's unsuccessful run in 2012.

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